Daily Market Recap – GOLD Prices supported by inflation fears

Gold prices climbed this week to their highest level in two months. The modest rise in bullion comes as the U.S. dollar eased and Treasury yields retreated after a sharp rise, helping to increase investor interest in the precious metal.

The recent rise in bond yields had helped reduce appetite for precious metals, which compete with government debt as a safe haven but offer no coupon to buyers. However, yields eased a bit to 1.74% on Friday (US 10-year yield).

The prospect of a series of interest rate hikes by the U.S. Federal Reserve has had a negative effect on gold, as higher rates reduce the attractiveness of non-performing gold and silver. The rate-setting FOMC is scheduled to meet on January 25 and 26.

Gold has often been used as a hedge against inflation. As such, the recent rise in the yellow metal comes in a market environment where investors feel that central banks are not doing enough to reduce price pressures.

The price of gold has regained its appeal to investors in recent sessions. The break of $1,830 is a first bullish technical signal. The market is thus well oriented to reach the next level towards 1,850 dollars.

In the medium term, it is clear that gold is evolving within a symmetrical triangle. Thus, crossing the boundary would lead to a solid bullish recovery.

In 2022, precious metals could return to the forefront, an opportunity to shine again after a rather lacklustre 2021 (-3.74% for Gold).

 (Chart Source: Tradingview )

As a result, we believe that gold has the wind in its sails to make a strong comeback and trigger a new wave of appreciation towards $1,910 and then $1,960.

Support & Resistance Levels:

R3       1,917

R2       1,877

R1       1,850

S1        1,820

S2        1,800

S3        1,753

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.